Use the Information for the Question(s)below

question 56

Multiple Choice

Use the information for the question(s) below.
Glucose Scan Incorporated (GSI) currently sells its latest glucose monitor,the Glucoscan 3000,to diabetic patients for $129.GSI plans on lowering their price next year to $99 per unit.The cost of goods sold for each Glucoscan unit is $50,and GSI expects to sell 100,000 units over the next year.
-Suppose that if GSI drops the price on the Glucoscan 3000 immediately,it can increase sales over the next year by 30% to 130,000 units.The incremental impact of this price drop on the firm's EBIT is closest to:

• A)a decline of $1.5 million.
• B)an increase of $1.5 million.
• C)a decline of $2.4 million.
• D)an increase of $2.4 million.

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Definitions:

Group Development

The process through which a group evolves over time, including forming, storming, norming, performing, and adjourning stages.

Legitimate Power

Power based on the position a person holds in an organization that is effective only when followers believe in the structure that produces this power.

Informal Group

A group formed naturally with no official structure or formal recognition, often based on personal relationships.

Group Process

The sequence of dynamic interactions and developments that occur within a group setting over time.